Sanctions bringing Kurdish economy to its knees

June 20, 1993|By Los Angeles Times

WASHINGTON -- The Kurdish enclave in northern Iraq is facing a crisis as a deteriorating economy, squeezed by sanctions from both the United Nations and Baghdad, is on the verge of doing what neither President Saddam Hussein's military might nor Baghdad's political pressure could do -- crush the Kurds.

The situation is now so critical that the number of displaced or aid-dependent Kurds is expected to grow this year from 700,000 to up to 1.1 million, according to relief agencies and recent visitors to the isolated region. And the unemployment rate has reached 70 percent, Kurdish development specialists say.

Without some dramatic reversal soon, Kurdistan's nascent democracy could founder and force the Kurds to fall again under Baghdad's control. The worst-case scenario is another mass exodus of destitute Kurdish refugees to international borders this winter, U.S. officials said Wednesday.

"The economic squeeze will eventually lead to a collapse of Kurdish society, the decline of law and order and possibly the new democratic institutions," said Henri Barkey, a U.S. Institute of Peace fellow and Lehigh University professor of international relations who just returned from Kurdistan. "Second, there will be serious starvation."

The crisis comes just as both the U.N. humanitarian program and the U.N. guards deployed in Iraq's isolated and vulnerable north are being threatened by lack of money.

"If we don't have the money, then we can't stock up on humanitarian goods," said Jan Elisson, U.N. under secretary-general for humanitarian affairs.

U.N. sanctions make purchase of Kurdish produce by other countries illegal, and so Kurds have no option but to sell their grain and agricultural products to Baghdad.

Over the past month, Baghdad has further exploited the Kurds' economic dependency by rendering obsolete the 25-dinar note, the country's largest denomination. Worth about $1.25 at the official rate and 75 cents on the black market, it was the amount in which most Kurds kept their cash.

Mr. Hussein closed off the border with Kurdistan, so that Kurds were cut off from exchanging the old notes for the new in the allotted time. Up to 40 percent of the Kurds' assets evaporated, Mr. Barkey said.